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Infrastructure development should factor in climate change issues: Suresh Prabhu

Special Correspondent

OVERCOMING BOTTLENECKS: Dr. Anil Khandelwal (left), Chairman-NMF and Chairman Bank of Baroda; Kewal Handa, senior vice president, All India Management Association; and Suresh Prabhu, MP, at National Management Forum-2007 in Chennai on Friday. — Photo: R. Shivaji Rao

CHENNAI: Any new investment in infrastructure should be adaptable to the needs of climate change and this aspect should be the principal driver of infrastructure upgradation, Suresh Prabhu, Member of Parliament, said on Friday.

Infrastructure was not a stand-alone component and must be linked to other aspects such as poverty, job creation, healthcare, education, water, sanitation and sewerage, he said while inaugurating the 17th National Management Forum on `Innovations to overcome Infrastructure Bottlenecks' organised by the All India Management Association and Madras Management Association.

Under-investment in infrastructure was a reality in India for the last 60 years. A suitable political economy was also needed to augment rural infrastructure. More than a trillion dollars was needed to meet the infrastructure needs of the country. There was a mismatch between the available talent pool and the existing infrastructure.

Private sector investments in infrastructure should be encouraged to tide over the fiscal deficit and should go along with proper fixation and collection of user charges. In China, for example, all services carried a user charge, including water.

"A balance should be achieved between user charges and affordability of services," Mr. Prabhu said adding that power sector projects, for example, had to be made commercially viable. A Special Purpose Vehicle should be created for the purpose and a strong regulatory framework mooted.

The reasons why investments in the telecom sector were successful was because the sector was under Central Government control, its front-ended benefits such as reduction in tariffs directly reached the consumers, the Government benefited from the revenue sharing model and technology was properly utilised, he said.

Though infrastructure development was already under way, financial constraints were also a reality, Anil Khandelwal, chairman of Bank of Baroda and chairman of the forum, said.

There was a need to move from traditional sources such as commercial banks to newer sources.

Inadequate infrastructure continued to be "India's biggest embarrassment" and it must be made to keep pace with the growth rate, he added.

The onus for developing infrastructure was not entirely the Government's and innovations had to be incorporated in developing suitable policies, C. K. Ranganathan, president, MMA, said.

G. K. Nischol and Kewal Handa of AIMA and Bhaskar Subramaniam, principal consultant, PricewaterhouseCoopers, also spoke.

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